Explain What Information That Changes in the Value of a Firm's

question 210

Essay

Explain what information that changes in the value of a firm's stocks provide for a firm's managers and for investors.

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Definitions:

Expected Rates of Return

The anticipated percentage gain or loss that an investment is predicted to generate over a given period of time, taking into account both known and estimated variables.

Probability Distribution

A function that represents the likelihood of various outcomes in a random experiment.

Average Portfolio Standard Deviation

A measure of the volatility of all the assets in a portfolio, calculated as the square root of the variance of the portfolio's returns.

Coefficient of Correlation

A numerical metric evaluating the magnitude and orientation of a linear correlation between two variables, with values spanning from -1 to 1.